Published on 16 April 2015
The recently announced sale of most of GE
Capital’s assets - the finance arm of General Electric - has no rating
implication on the AAA/stable rating of Hyundai Capital Services, Inc’s
(Hyundai Cap or the Company) RM2 billion MTN Programme (2008/2028).
Hyundai Cap’s issue ratings reflect its position as the leading
automobile financier in South Korea, and the captive financier for the
country’s largest automotive group - Hyundai Motor and Kia Motors - and
our expectation that extraordinary support from Hyundai Motor will be
readily extended if required, as has been demonstrated in the past.
Hyundai Cap is majority-owned by Hyundai Motor (56.5%), while GE Capital
has a 43.3% stake.
Over the years, Hyundai Cap has benefited
substantially from GE Capital’s involvement in its risk-management
framework. The Company has an emergency liquidity line from GE Capital
that had been handy as a contingency measure during the global financial
crisis, when liquidity had tightened in South Korea. Since then,
however, GE Capital has reduced the quantum of this liquidity support.
As GE Capital has been scaling back its operations globally, we are of
the view that this trend will likely be eventually reflected in its
involvement in Hyundai Cap.
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